Illinois community banks trail Midwest, national peers in key financial metrics

Illinois community banks performed worse than its Midwest peers and national community banks in five of six key financial metrics in 2023.

Illinois-based banks with under $10 billion in assets underperformed in terms of median return on average assets (ROAA), net interest margin (NIM), efficiency ratio, and deposit and loan growth rates in the year ended Dec. 31, 2023, according to an S&P Global Market Intelligence analysis.

The Illinois community banks logged a median ROAA of 0.89% and a median NIM of 3.16%, which was lower than Midwest community banks' median ROAA of 0.92% and median NIM of 3.22%. National community banks posted a median ROAA of 0.96% and median NIM of 3.37%.

Illinois community banks' median efficiency ratio of 69.07% was higher than Midwest community banks' 67.57% and national community banks' 67.13%.

On a year-over-year basis, Illinois community banks recorded a 0.6% climb in total deposits and 6.6% growth in total loans and leases. By comparison, the Midwest median deposit and loan growth were 0.7% and 7.6%, respectively, and the national median deposit and loan growth were 0.9% and 7.7%, respectively.

Meanwhile, Illinois community banks' median cost of funds was 1.24%, better than the Midwest median of 1.39% and the national median of 1.41%.

Largest banks' performance

Byline Bank, the largest Illinois community bank by assets, outperformed the medians of Illinois, Midwest and national community banks in reporting an ROAA of 1.45%, an NIM of 4.45% and an efficiency ratio of 50.21%. The bank's cost of funds, however, was higher, at 1.98%.

Byline Bank's parent company, Byline Bancorp Inc., acquired Inland Bancorp Inc. in June 2023. The bank's total assets were $8.87 billion at the end of 2023, up from $7.35 billion a year earlier.

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Midland States Bank, the second-biggest community bank in Illinois, had an ROAA of 1.01% and an efficiency ratio of 53%, both better than the medians of Illinois, Midwest and national community banks. The bank's NIM was 3.32%, higher than the medians of Midwest and Illinois community banks but lower than the national median.

Year over year, the Midland States Bancorp Inc. subsidiary's total assets grew slightly to $7.86 billion from $7.85 billion.

Among the 20 largest Illinois community banks, Signature Bank logged the highest ROAA at 1.76% and the lowest efficiency ratio at 41.51%. Old Second National Bank booked the highest NIM at 4.55% and the lowest cost of funds at 0.66%.